Northern Rock, Precise Mortgages, GE Money and Barclays, all noted the issue on a lenders panel at the Mortgage Business Expo in Manchester.
Richard Tugwell, head of sales at Northern Rock, said: “We are heavily dependent on demand rather than what we want to lend. The pivot will be the base rate rise, but that will not be till the back end of the year or first quarter.
“Demand is the problem; not funding and liquidity. Part of that is products, but part of that is people not wanting to move.”
Alan Cleary, managing director of Precise Mortgages, said: “Whether lenders want to lend is secondary to whether borrowers want to borrow.”
He added: “Funding has gone on the back burner. Consumers are very reticent and that’s where the issue is. Even if interest rates start to rise, I’m not convinced that we will see a flood of remortgage business.”
Likewise, Mark Snape, secured sales director of GE Money, said: “We want to do more lending, but this is dependent on applications.”
However, Cleary and David Finlay, intermediary channel director at Barclays, denied delegates’ suggestions that lenders were “bellyaching” about not being able to lend enough.
Cleary said: “There are other issues at play. If lenders went up the LTV curve, they would get rid of lots of funding. But no investor will fund that and the regulator will not allow it because lenders have to put four times the capital against it.”
Finlay added: “Our average LTV is 68% and moving up the LTV curve. As it gets competitive, we will look at higher LTVs, but the costs involved are huge. It doesn’t make commercial sense.”
However, he maintained there was a “huge opportunity” for brokers to target people on lower LTVs, with millions of fixed rates originated two, three or five years ago due to finish soon.
